Rethink on supported housing can’t come soon enough

25/10/2017

MPs are due to debate the future of supported housing today amid reports that the government is to rethink plans to cap housing benefit for residents. CIH chief executive Terrie Alafat says such a move can’t come soon enough.

It’s been more than a year since the government announced details of its proposals for the future funding of supported housing – capping housing benefit for people who live in supported and sheltered housing to the Local Housing Allowance (LHA) rate and providing a ‘top-up fund’ to local authorities to make up the difference. In common with many other organisations, CIH has consistently been calling on ministers to think again, because of the impact these plans would have on older people, people with mental and physical disabilities and victims of domestic abuse – some of the most vulnerable people in our society, in other words. Now the Labour party has secured an opposition day debate on the issue, while reports surfaced in the media over the weekend that ministers are planning to re-examine their original proposals.

A considerable amount of damage has already been done. The National Housing Federation (NHF) reported earlier this year that housing associations providing supported, sheltered and extra care housing have had to slash plans to build new homes by 85 per cent because of the uncertainty over future funding. Of course, the huge discrepancy between LHA levels and the actual cost of providing supported housing in different areas has not only put on hold plans for new developments but raised concerns about the viability of existing schemes. The NHF has estimated that across the country, an estimated 156,000 homes or 41% of all supported housing would become unviable and be forced to close if the cap were implemented.

Riverside and other providers highlighted that, in the North East, 40 per cent of supported housing schemes had costs above LHA compared to six per cent in London. The three biggest specialist providers of housing for older people estimate an overall shortfall of £64 million between LHA rates and actual rents, hitting the North and Midlands particularly hard. Earlier this week Rethink Mental Illness published new research highlighting that people with the highest support needs are most likely to be affected by the proposals, adding: “This could be disastrous both for individuals with mental illness and the public services that will need to support them.”

So there is no shortage of evidence on the potential impact of this policy – indeed, a joint Work and Pensions and Communities and Local Government select committees report published back in May said the government should look again at the proposals and forget plans to use the LHA as a starting point. In our submission to next month’s Budget we called on ministers to adopt the report's recommendation to develop a supported housing allowance that could address the wide range of supported housing models and tackle the huge risk for supported housing in areas with low LHA, and to work with the sector in developing it. Piloting the new approach will be critical; getting this wrong puts at risk the homes and help many people need.

Supported housing already helps public services like health and social care to address the challenges they face from increasing demand and high costs; alongside the new framework we need to look at how much more could be done through a strategic approach to meeting local needs across housing, health and care. But to achieve this we need a funding system that provides long-term certainty, and for that funding to meet actual costs, with the flexibility to adapt to changing needs in the future.

Ministers and officials must take a long-term and strategic approach that will provide what we all want – a funding system that can encourage and support the development of more high-quality supported housing.

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